UPDATE: A potential breakthrough in the stalled EU-Australia free trade agreement is emerging, with crucial agriculture concessions on the table. Negotiators are working urgently to finalize a deal that has faced significant challenges, particularly over Australian agricultural access to European markets.
Authorities report that Australian sheep and beef exports have been the primary sticking points, with European farmers expressing fears of unfair competition from cheaper imports. However, EU parliamentarian Sean Kelly emphasizes that production in Europe is either peaking or declining, suggesting that these fears may be unfounded.
A phased-in approach to the agreement, which is typical in trade negotiations, is being discussed. This could include a review mechanism and possible compensation for European farmers to address their concerns. Kelly warns that failure to secure a deal for a third time could set negotiations back five to ten years.
“I wouldn’t vote for anything that I thought was detrimental to agricultural interests,” Kelly stated, referencing his agricultural background. He added that previous fears have often not materialized as markets adjusted, resulting in benefits for all parties involved.
To further alleviate concerns, Europe has committed to providing guarantees and protections for farmers as they monitor the impacts of the Mercosur deal with South America. This includes provisions to take action if European market prices are adversely affected. Kelly explained that a sunset clause would allow parties to exit the contract if specific provisions are not met, ensuring that European farmers are protected.
With Europe currently not filling its agricultural quota with Canada, Kelly noted that the trend in Europe is a reduction in production rather than an increase, suggesting that increased Australian access may not lead to significant market distortion.
During a recent meeting in Canberra, the delegation, which included Trade Minister Don Farrell, underscored the urgency of securing this trade deal. Kelly highlighted that the current geopolitical climate, marked by US tariffs and an “unreliable” China, underscores the importance of forging strong trade relationships.
He stated,
“The answer to tariffs is free trade.”
The deal could also enhance defense cooperation, providing a reliable supply of critical minerals essential for military technology, which would strengthen supply chains for Europe.
Looking ahead, Maros Sefcovic, the European Commission’s trade chief, is scheduled to visit Australia at the end of November 2023. This visit coincides with a meeting of trans-Atlantic free trade pact members, reflecting Europe’s interest in deepening partnerships.
Australia is set to chair the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2025, with Senator Farrell hosting counterparts in Melbourne later this month. This trade deal is not only about economic benefits; it is about building a resilient and strategic alliance in an increasingly complex global landscape.
As negotiations continue, all eyes are on the EU and Australia to see if they can finally overcome the hurdles that have kept this vital trade agreement on hold. The implications for both economies are significant, making this a critical moment for international trade relations. Stay tuned for more updates as this story develops.
